In 2020, Indian customs authorities seized dual-use equipment from a Pakistan-bound merchant vessel, the Da Cui Yun, at Kandla port in Gujarat.

The shipment was mis-declared as containing industrial dryers, but Indian investigators identified the items as autoclaves—equipment used for handling sensitive high-energy materials and for insulation and chemical coating of missile motors.

These autoclaves are critical components in missile development and are listed under the Missile Technology Control Regime (MTCR) dual-use export control lists. The bill of lading for the seized cargo revealed a direct link between the importer and Pakistan’s National Development Complex (NDC), a defence and aerospace agency under Pakistan’s defence ministry heavily involved in the development of long-range ballistic missiles.

The Financial Action Task Force (FATF) included this case in its recent report highlighting vulnerabilities in the global financial system, particularly in the misuse of maritime and shipping sectors to transport dual-use goods and evade sanctions.

The report categorised the incident as a violation of export laws due to the non-declaration of dual-use goods and underscored the ongoing challenges in countering proliferation financing (PF) related to weapons of mass destruction (WMD).

Despite the serious threat posed by PF, only 16% of countries assessed by FATF have demonstrated high or substantial effectiveness in implementing targeted financial sanctions under United Nations Security Council resolutions.

The report warns that unless both public and private sectors enhance technical compliance and enforcement, illicit actors will continue exploiting weaknesses in controls to finance WMD proliferation.

This seizure and its inclusion in the FATF report serve as evidence of Pakistan’s efforts to circumvent international export controls to advance its missile program.

The NDC has been a pivotal entity in Pakistan’s missile development, and the shipment’s interception highlights the use of sophisticated methods to disguise and transport sensitive military technology.

The FATF report also signals increased scrutiny of state-sponsored proliferation financing, with Pakistan named alongside countries like North Korea and Iran as high-risk for such activities. India is expected to use this disclosure to bolster its case for renewed international sanctions or monitoring against Pakistan in upcoming FATF and Asia Pacific Group meetings.

Agencies